Spooky Spending Keeps Markets Sweet
October 30, 2025
Spooky season is here, and as consumers have prepared for Halloween tomorrow, they have likely noticed an increase in the cost of candy, decorations and costumes. Halloween has become more expensive this year, with candy and costumes increasing by 10.8% and 11.0%, respectively.1,2 However, despite the frighteningly high costs, consumers continue to spend. According to the National Retail Federation, Halloween spending is expected to reach a record $13.1 billion in 2025, with 73% planning to celebrate the holiday this year.3
These few Halloween statistics reflect a trend that extends to the broader economy as well. Consumers continue to spend despite tariffs and inflation, especially on services, travel and discretionary goods. Retail sales activity remains strong, with the most recent U.S. consumer spending report in August showing an increase in spending that was higher than expected.4 This stronger-than-expected spending and demand is flowing through to corporate earnings. Today’s Chart of the Week shows that as of last week, approximately 85% of S&P 500 Index firms that have reported third-quarter earnings so far have surpassed profit estimates, which is the highest since 2021.5 These record-breaking corporate earnings are providing support to markets, as the S&P 500 Index is reaching new highs and credit spreads are hovering near all-time lows.6 The U.S Corporate Aggregate Index is at a spread of 76 basis points, showing that bond investors are not being compensated much compared to government bonds of the same maturity.7
Key Takeaway
Continued strong corporate earnings are easing investor concerns regarding the economy, providing support to markets. As we enter the thick of earnings season, I expect corporate earnings to continue exceeding expectations. The tricky part for an investor is finding value amid these strong earnings, as credit spreads continue to be tight, to determine if the reward for taking unusual risks is worthwhile.
Sources:
1CNN – Why Halloween candy is getting more expensive and less chocolate-y; 10/27/25
2CBS News – Halloween costume prices are rising. Here's how one man uses thrifting to help families in need; 10/18/25
3National Retail Federation – NRF Consumer Survey Finds Halloween Spending to Reach Record $13.1 Billion; 9/18/25
4Reuters – Solid US consumer spending in August underscores economy's resilience; 9/26/25
5Bloomberg – Early US Earnings Point to Best Corporate Results in Four Years; 10/22/25
6,7Bloomberg
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